One account for all assets

Industrialists discuss the budget at the Bengal Chamber of Commerce in Calcutta on Monday. Picture by Kishor Roy Chowdhury

New Delhi, Feb. 17: The government plans to bring all financial assets of an individual under a single account in the electronic format to ensure greater tax compliance.

“We want to create one record where all financial assets are held in the de-materialised form... Once the FSDC approves the report, we will implement it,” finance minister P. Chidambaram said in his interim budget.

He said all regulators had agreed that financial records of an individual should be made available and accessible in one record.

Analysts said it would take time to frame the modalities of operations of the common demat account. However, it would eventually help investors hold different asset classes such as equity, bonds, commodities and insurance together in a single account.

It is also important to sort issues such as KYC, pan card details, nomination and system integration, they said.

Chidambaram said the government had cracked down on alleged wealth stashed by Indians abroad and had initiated enquiries. Information has been received in 67 such cases and prosecution for wilful tax evasion has been launched in 17 others.

The finance minister said the government had succeeded in obtaining information on black money “despite several hurdles from the countries concerned” in sharing account details.

The government is taking “special efforts and alternative measures” to get information on cases of alleged tax evasion from zero or low- tax jurisdictions abroad, he said.

The issue of black money has assumed significance in the event of the upcoming elections with the main opposition party BJP and the Aam Aadmi Party targeting the government for its failure to track tax evaders.

In 2012, industry body Ficci had estimated total black money abroad at about Rs 45 lakh crore, while the BJP, a year earlier in a 2011, had estimated the country’s black economy to be between Rs 27.5 lakh crore and Rs 74 lakh crore.